How Texas Title Companies Work in a Home Sale

In Texas, title companies handle the closing process for nearly all residential real estate transactions — they're the neutral party that makes sure the money and the deed transfer correctly and legally. Here's what they do and what it costs.

What a Title Company Does

Title search: Reviews county records to confirm the seller actually owns the property and has clear title — no unknown liens, judgments, or ownership disputes
Title insurance: Issues policies protecting the buyer (and lender) from undiscovered title defects
Escrow: Holds earnest money and closing funds in trust
Closing: Prepares all closing documents, coordinates signing, disburses funds, and records the deed

Who Pays Title Costs in Texas?

In Texas, by convention, the seller pays for the Owner's Title Insurance Policy. The buyer typically pays for the Lender's Title Insurance (if using a mortgage). Closing fees are split or negotiated. On a $300,000 sale, owner's title insurance runs $1,800–$2,200. Total closing costs for the seller typically run 1–2% of the sale price.

What Is a Title Commitment?

Before closing, the title company issues a Title Commitment — a preliminary report showing what title insurance they're willing to issue and under what conditions (Schedule A: property and parties; Schedule B: exceptions and requirements). Review Schedule B carefully — it shows all liens, easements, and conditions that affect the property.

Common Title Issues That Delay Closings

Outstanding liens (tax liens, HOA liens, mechanic's liens)
Unreleased mortgages from prior loans
Errors in previous deeds (misspelled names, legal description errors)
Judgments against the seller in their personal name
Easements not previously disclosed
Heir issues on inherited properties

Cash Sales and Title Companies

Cash sales still use title companies in Texas — they just move faster without lender involvement. No appraisal, no underwriting, no lender conditions. The title company performs the same title search and issues the same insurance. Many Texas cash sales close in 7–14 days specifically because the only bottleneck is the title search and any issues it uncovers.

Frequently Asked Questions

Do you need a title company to sell a house in Texas?

Technically no — Texas doesn't require a title company by law. But almost all lenders require title insurance, and cash buyers typically require a title company closing to ensure clean transfer. Virtually all residential transactions in Texas close through a title company.

How much does a title company charge in Texas?

Title company fees vary but typically run $1,500–$3,000 for the seller on a standard transaction, including the owner's title insurance premium, escrow fee, and document prep. On a $300K home with seller-paid title insurance, expect $2,000–$2,500 total.

Official Resources & Further Reading

TDI — Title Insurance in Texas — Texas Dept of Insurance
TREC — Escrow and Closing — Texas Real Estate Commission
CFPB — What Does a Title Company Do? — Consumer Financial Protection Bureau

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